There are a couple of common analogies for startups wooing potential investors, said entrepreneur Brian Razzaque — it's like herding cats, or getting one lemming to lead the others. Most investors are wary of bankrolling an unproven company without someone else's seal of approval.
That's why the backing of the Maryland Technology Development Corp. was so valuable for Razzaque's social media marketing company SocialToaster when it sought to raise capital in 2013. After a complicated vetting process, which involved estimating the company's value and negotiating a contract, the quasi-public agency invested some money in SocialToaster. In turn, the company was able to more easily sign on several other investors, raising $1.3 million in all.
